Zinnat out curiosity, how is Indian and Chinese relations going over there?

The temple mount will be rebuilt in Jerusalem and all the nations of the world will be ruled from there. All races, cultures, leaders, and nations will come to bow before the new messiah yet to come. All will come to know the chosen of God who refer themselves as Jews. For every Jew there will be a thousand goyim that will be their slaves as it was ordained by God. Every man, woman, and child will convert to Zionism.

If God is money, then perhaps goodness, love, fidelity , honesty can be bought with it. Maybe that is the key to the psychology of the market place, and that should be the moral lesson to the various ministries who preach this.

In fact when push comes to shove, the big fish will always come through, they will buy and buy and buy and buy until it can trun around, then they turn into sharks , and take what's left by hostile take over.

If one wants to fight someone, it would be wise to access the weakness and strengths of the enemy before provoking the enemy. Only a fool would provoke first and think later, even more so in the case when it is not about an individual but a whole of the country can be severely affected by that.

These so called tariffs imposed by both countries on each other means nothing to either in real terms. All that is nothing but merely posturing. It would not disturb the economy of either country much. Both are aware of it too. The real issue is if this situation can escalate to such extent where both would really start hurting each other. And if that ever happens, US would be a greater loser by a fair margin.

There are three main reasons of that. First one is that US based MNCs have a huge investments in China. On the other hand, there is no Chinese co has manufacturing base in US. After a certain level, the tension between the two countries would start hurting China based US cos in one way or other. That would ultimately hurt US economy.

The second reason is that China is not a democracy like US. China can force its cos/citizens to suffer in the name of nation and nobody can raise a voice against it but that facility is not available to Trump. US people are not ready to suffer any negative consequences because of what Trump think is justice, even if he is right. Nobody cares about country but himself only. I am sorry to say that applies more in the case of US people.

The third reason is like China having such a nuke which US does not have. Over the last two decades, China used its all trading surplus with US in buying US bonds and bills. Right now, China is the biggest holder of US treasury bonds and bills. The second one is Japan. I am not aware of latest figures, but China alone owns more than 10% of US bonds and bills. In other words, we can say that China is the biggest US creditor, and you cannot mess with such a person.

If this tension escalates beyond a point, and China decides to sell its entire US paper, that would be an economic catastrophe not only for US but for the entire economic world. Even a hint of any such possibility has the potential of bringing stock markets and USD down to the tune of 10% in a single day. And, seeing the biggest holder coming to sell its stake, others holders will also not have any option but to sell their US paper holding in order to avoid losses.

It is not the case that China would not suffer in that case. Yes, of course, it would also suffer but as i said before, being almost a quasi dictatorship, it can withstand that suffering without much visible noise. And, we can easily imagine what will happen in the case of US.

Having said that, i hope and my assumption is also that things would not go to that point. Trump is just trying to play hardball but unfortunately he has chosen a wrong opponent for that. China is neither Mexico nor Canada, not even Russia.

Hi Zinnat. A very interesting thread. I have a few disagreements, which I hope will prove constructive.

zinnat wrote:Trump is an obvious fool.

That apparent obviousness should always be a warning. And a fool doesn't attain the highest office in the world.A mere middle class citizen should never think he can judge such a powerful person to be a fool.

If one wants to fight someone, it would be wise to access the weakness and strengths of the enemy before provoking the enemy. Only a fool would provoke first and think later, even more so in the case when it is not about an individual but a whole of the country can be severely affected by that.

The US economy needs to be shaken up and rearranged.

These so called tariffs imposed by both countries on each other means nothing to either in real terms. All that is nothing but merely posturing. It would not disturb the economy of either country much. Both are aware of it too. The real issue is if this situation can escalate to such extent where both would really start hurting each other. And if that ever happens, US would be a greater loser by a fair margin.

It makes a big difference for a lot of smaller companies in the US, though for Chinese companies, since there is no freedom there, it won't bring as much gains.

There are three main reasons of that. First one is that US based MNCs have a huge investments in China. On the other hand, there is no Chinese co has manufacturing base in US. After a certain level, the tension between the two countries would start hurting China based US cos in one way or other. That would ultimately hurt US economy.

China has bought a lot of harbours and real estate in the US, which the US can simply "repatriate" if push comes to shove. It is not in Chinese best interest to make things boil over with the US. Right now the US etablishment considers its president its worst enemy, but that will change quickly once China becomes openly hostile.

The second reason is that China is not a democracy like US. China can force its cos/citizens to suffer in the name of nation and nobody can raise a voice against it but that facility is not available to Trump. US people are not ready to suffer any negative consequences because of what Trump think is justice, even if he is right. Nobody cares about country but himself only. I am sorry to say that applies more in the case of US people.

The opposite is the case. China needs to be a dictatorship because if people were allowed to do their own thing, the country would instantly fall apart. There is no true loyalty in China, only fear and helpless emasculated populace that, if they were set free, would be like early adolescents, entirely selfish and irresponsible.

The third reason is like China having such a nuke which US does not have. Over the last two decades, China used its all trading surplus with US in buying US bonds and bills. Right now, China is the biggest holder of US treasury bonds and bills. The second one is Japan. I am not aware of latest figures, but China alone owns more than 10% of US bonds and bills. In other words, we can say that China is the biggest US creditor, and you cannot mess with such a person.

If this tension escalates beyond a point, and China decides to sell its entire US paper, that would be an economic catastrophe not only for US but for the entire economic world. Even a hint of any such possibility has the potential of bringing stock markets and USD down to the tune of 10% in a single day. And, seeing the biggest holder coming to sell its stake, others holders will also not have any option but to sell their US paper holding in order to avoid losses.

If it woud sell its bonds that would be a major relief for the US, as even though it would cause a one time blow, it would also mean that China loses its leverage. China has only one barrel here and it won't likely shoot through all its powder at once.

In the end, the creditor is the more vulnerable one, as he is the one who stands to lose. Especially if the debtor is the one with the most weapons.

It is not the case that China would not suffer in that case. Yes, of course, it would also suffer but as i said before, being almost a quasi dictatorship, it can withstand that suffering without much visible noise. And, we can easily imagine what will happen in the case of US.

This overestimates the condition of China. It has been stretching its peoples resources for many decades. It won't be able to absorb serious blows. Which is why it keeps conceding to Trump.

Having said that, i hope and my assumption is also that things would not go to that point. Trump is just trying to play hardball but unfortunately he has chosen a wrong opponent for that. China is neither Mexico nor Canada, not even Russia.

Canada is not the opponent of the US by any means. And Russia has been giving signs of defeat, by allying with Turkey and proclaiming that the US is in inevitable decline. The military budget of the US alone equals Russia's entire GDP. This also means they aren't of that much use to China as economic ally. China needs the US, and it needs Europe, so Trump can go a long way still in pressuring them.

It is only good for Wallstreet to be re-arranged. It presents a lot of new investment opportunity. But only for those that look at actual value-futures, rather than those merely analyzing graphs and trends. That is the feminine part of the game, where value-discernment is the masculine side. Trumps rule favours the masculine side, which goes to the heart of things and is not impressed with the surface.

April Joyner wrote:NEW YORK (Reuters) - U.S. stocks were higher on Tuesday as investor concerns about rising U.S.-China trade tension eased after Chinese President Xi Jinping promised to cut import tariffs.

The technology sector <.SPLRCT>, which would be particularly exposed to a negative impact from tense trade relations with China, provided the biggest boost to the S&P.

Xi said China will widen market access for foreign investors, a point of contention for U.S. President Donald Trump's administration.

China's economy, which is completely compulsive with a stretched out workforce and very limited capacity for innovation, has no alternatives but to force a steady course or sink. The US economy, consisting of free entrepreneurs and having very high minimum wages that can aways be lowered in crisis plus a steady influx of foreign workers, is simply unable to sink. The US can take ten times the blows that China can. China is a porcelain tiger. The US is a racehorse that has taken a long nap and is just waking up.

China’s ability to go toe to toe with the United States in the ongoing trade dispute was cast into doubt by economic data released this week showing an economy that had slowed down by far more than expected.

Fixed income investment, which includes spending on machinery and infrastructure, rose 5.5 percent compared with a year ago, down from 6.0 percent in the prior month. Economists had expected 6.0 percent. It was the lowest level of fixed income investment growth since 1999, before China ascended to the World Trade Organization.

Industrial production was up 6.0 percent, below the 6.3perrcent forecast. Unemployment rose to 5.1 percent last month, up from 4.8 percent in June.

Taken together, the data suggest that China can’t go toe-to-toe in retaliating against U.S. trade levies, said Shuang Ding, an economist with Standard Chartered Bank in Hong Kong.

“China should avoid adopting a direct, confrontational approach in the trade fight with the U.S. and focus on strengthening its economy first,” Mr. Ding said.

The U.S. economy, by contrast, is showing many signs of strength. On Tuesday, the National Federation of Independent Business reported that small business optimism had risen to just below its all-time high set back in 1983. The Atlanta Fed’s GDPNOW, a real time estimate of GDP based on the most recent economic data, has the U.S. economy growing at a 4.3 percent rate. Last quarter, the U.S. economy grew at a 4.1 percent rate, according to U.S. government data.

This is causing turmoil with elite Chinese circles. the New York Times reports:

China’s leaders have sought to project confidence in the face of President Trump’s tariffs and trade threats. But as it becomes clear that a protracted trade war with the United States may be unavoidable, there are growing signs of unease inside the Communist political establishment.

In recent days, officials from the Commerce Ministry, the police and other agencies have summoned exporters to ask about plans to lay off workers or shift supply chains to other countries.

Even China’s Global Times, a state-controlled newspaper that typically trumpets China’s strength, is sounding worried notes. “Data may be worrying, but government will stick to reforms,” the Global Times reported.

“Despite complex and severe internal and external situations, China will maintain sound and stable economic fundamentals as well as a trend of transformation, upgrading and structural adjustment, Liu Aihua, spokesperson for the NBS, said at a press briefing on Tuesday,” the Global Times said.

China’s faltering growth is undermining assumptions that China’s command economy and dictatorial political system somehow makes it better able to withstand a trade dispute.

From the New York Times:

China’s leaders have argued that they can outlast Mr. Trump in a trade standoff. Their authoritarian system can stifle dissent and quickly redirect resources, and they expect Washington to be gridlocked and come under pressure from voters feeling the pain of trade disruptions.

But the Communist Party is vulnerable in its own way. It needs growth to justify its monopoly on power and is obsessed with preventing social instability. Mr. Xi’s strongman grip may be hindering effective policymaking, as officials fail to pass on bad news, defer decisions to him and rigidly carry out his orders, for better or worse.

Over at the Wall Street Journal, Nate Taplin explains:

It seems likely that misjudging the U.S.’s resolve on trade—while simultaneously overdoing the debt crackdown at home—has damaged Mr. Xi politically. What isn’t clear is how deep that damage cuts.

Regardless, a period of political horse trading now seems likely, as Mr. Xi’s emboldened opponents reassert themselves.

The U.S. is planning to implement a new, larger round of tariffs on Chinese goods, which would likely put even more pressure on China’s leaders to step back from their confrontational approach to the Trump administration.